Resources, links, opinion, news, and commentary for foreigners and expatriates living or visiting Argentina.

Sunday, December 11, 2005

Money Options For Expats

I got a question from a reader today who has e-mailed me several times before and, like many of us here once did, is struggling to make the decision to move here. While I'm always very eager to point out Argentina as a great place for people to choose to live or retire, I certainly don't want to do that if people aren't going to be comfortable financially here.

Reader's Comment

Hello. I've come across your site many times. Anyways, I am an American/Argentine girl with so much confusion, 35 years old, been back and forth and need to decide something. Sometimes I just want to do it - [move to Argentina] and let whatever happens be. What makes it so hard is that I have had ups and downs here and there. I wish I had all the money in the world - you can do whatever, clean up after after any mistakes, try something else, not have to plan.

Money Options For Expats

Your case is a little different than most expats because you're Argentine, bilingual, you have a DNI, and you don't need a visa to come here. For most people, however, when they decide to come here, one of the first things the Argentine government is going to ask them when they apply for a visa is how they're going to support themselves. Basically, the entire Argentina visa process is designed to let in people who are going to contribute to the economy and keep out people who are not.

You should ask yourself the same questions. When I applied for my visa, I was given three options, which are pretty much the same three options that will apply for you as well.

You can support yourself with an income from abroad. I did this with my small IT consulting business. Others do it by telecommuting, working as some kind of consultant, or simply living off the income generated by their investments. For those lucky retirees out there, you can support yourself with an income from social security, annuities, or a government / private pension.

You can start a business in Argentina. The government requires that an immigrant have $40,000 USD to invest in a business to get a visa, but since you don't need a visa, you wouldn't necessarily have to invest $40,000. You'd only need to invest enough to make enough profit to support yourself.

The final option is to simply get a job. Unemployment has fallen dramatically since 2002 and the economy is growing at 10% annually. Companies are hiring again. For most expats, they're limited by the language factor. If you don't speak Spanish, you're pretty much limited to teaching English, working in tourism or some other job focused on foreign English-speaking clients, or else you're being relocated here by some Fortune 500, in which you're being paid in dollars and money is not an issue.

However, you're a little different than most people who are moving here. As a bilingual Argentine who's been living in America for a long time, you should have no problem at all finding a job in the local market. Unlike the rest of us who are limited by our knowledge of Spanish, you have no such limitation. You could probably do whatever you're doing in the U.S. here. Maybe it'll take you a little longer to find a job, since you don't have a lot of contacts here, but there's no reason to believe you couldn't work here successfully.

Considerations For Workers

If you're going to be working in the local market, remember that you'll be earning a salary in pesos now. There are a lot of fully bilingual Argentines that you'll be competing against for a job and even though you've lived in the United States for a long time and perhaps have acquired some extra skills that put you a step ahead of your peers here, you won't be able to command a huge salary from an employer.

There is, perhaps, one exception to this rule. If you have good contacts in the U.S. and you can bring-in business for a company here, you can probably be paid well as a sales person. Barring that, I don't think any American expat should expect to earn anywhere near what they did in the U.S. when they're here.

You should ask yourself whether you're OK with that. Remember that it will also be much harder to return to the United States someday if you take a job in the local market here. Realistically, you're probably going to be earning one-fifth or less of what you earned in the United States for doing the same work. Suppose you worked here 10 years. You'd lose out on 10 years of Social Security credits, 401(k) or pension contributions and you'd save a lot less money. It may put you in a difficult position if you intend to retire in the U.S. someday.

Sure, you'll be building-up an Argentine pension, but as much as I don't trust Washington politicians to follow-through on their Social Security promises, I sure as hell don't trust the ones here. They've already cut pensions and retirees are given a pittance. At 35, the worst-case scenario for you with Social Security is that you get your benefits cut by a third.

Recommendations

My recommendation for anyone thinking of coming to live here for a significant amount of time (who is not independently wealthy) is that you try to have a job that pays you in dollars. Barring that, make sure you have a nice retirement fund and enough credits to quality for Social Security. You don't want to jeopardize you're retirement to come here. I certainly wouldn't want to end up being forced to work as a Wal-Mart greeter at 85 because I don't qualify for Social Security.

Good luck and I hope you're able to figure out a way to come to Buenos Aires!

4 Comments:

Since the Expatriado moved to Argentina, prices have gone up about 25% yet the dollar value has stayed the same. This means that the cost of living has gone up therefore reducing in a dramatic way the advantage of living there. Furthermore, inflation is predicted to go up another 10% or so next year, while the dollar will continue to be steady at around $3. Thus, the promise of living in a cosmopolitan area with a reduced cost of living is coming to an end. Expatriado: Do you think it still makes sense to go live there in light of these new developments?

I am also an Argentinian, 35 y.o., living in the US for almost 20 years and currently contemplating a move back .....in Arg right now investigating biz opportunities as part of the incentive is to start my own biz rather than working for someone else. Basically i consider a move to be risky given the ups and downs of Arg which i dont envision would end anytime soon but think the move might be worth it provided i am able to build enought of a cushion for a worst case scenario. Every move i have made in my life i have consistently asked myself, what is the worst that can happen and can i cope with that. Good luck with whatever the decision of the Arg might be and i would appreciate a chance to talk things further if interested. Ill write to expatriado independently and provide my e-mail address to that end.

Hello Everyone. Thank you so much for posting my concerns. I am that American/Argentine gal.

I have to clarify something - I am American, born and raised. However, born and raised fully influenced Argentine.

I am fully bilingual in every aspect and work here in the US has been good because of that. I have worked in 5 star hotels in Human Resources.

Trust me, back in 2001 when I was in Argentina, no one gave me the time of day. Hilton, Four Seasons. Marriott - no one cared about my experience. If anything they shunned me. The only thing I found was Wall Street Institute teaching English. It was not bad but of course had the parents "concerned" about the future.

You all must ask "in your 30s you are still tied up with your parents?" There you have it, that Argentine way of being raised. It fits well there but NOT in the US.

So now I have sold a home and have money. Some tell me to buy an apartment and rent it out to provide income. I would have to look at it in smaller scales, not like some lucky folks who have 200k to drop into a property and rent it out for 2,500k.

Sometimes I just think to forget about Argentina but sadly, it's a part of me and I have an immense interest in people out in the streets and cafes.

Everyone I meet wants to move here. They have this dream in their head of having this glamorous life, doing steak lunches, etc. I have to admit, moving here was the best decision of my life. I don't see myself moving back to the USA.

There is something very different about me. I planned for 2 years and made a business plan, invested a lot of time and especially money in my business. Most people moving here are just willing to wing it.

It's almost impossible to find a job here that pays in u$s dollars. One of the best prospects is buying real estate and renting it out for income. I have several clients that do that. I myself own many properties here. I rent them out and honestly I would never have to work again if I didn't want to. The rental income in them is more than what most executives in the USA make.

The key for those wanting to move here is really plan it out. Listen to El Expatriado. It's not easy to make money here and what happens if you work here for years and then want to go back to the USA. You will end up with no real savings.

I have many affluent employees that come from great families. Guess what? Most of them are still living at home with mom and dad which is common here.

The best game plan is to try to start your own business which is not easy as this is one of the most difficult countries in the world to do business in. It can be done though.